Housing prices are rising (again) with income growth in the toilet at the national level along with mortgage purchase applications.
But at the local level, San Francisco, Los Angeles and San Diego are cooking!
How unaffordable is the San Francisco housing market? An “uninhabitable” home in Palo Alto is on the market for $1.8 million.
But it is Palo Alto with Stanford University, Google and Apple Computers nearby.
I wonder how Vince Vaughn and Owen Wilson could afford housing while interning at Google in “The Internship”?
I hope they make a pile of money when it costs $1.8 million for a Palo Alto junker!
New home sales were flat in September after being revised downwards for August. And remain at 1982 levels.
Oct. 24 (Bloomberg) — Purchases of new homes in the U.S. were little changed in September after the prior month was revised down, showing an uneven recovery that will limit how much residential real estate contributes to growth.
Sales rose 0.2 percent to a 467,000 annualized pace from a 466,000 rate in August that was 7.5 percent weaker than previously estimated, Commerce Department data showed today in Washington.
The big gainer? The midwest where the Lebron James effect came roaring back as the NBA preseason began. The big loser? The West where is was announced that 40 year old Laker guard Jim Nash is out for the year with a bad back.
And median new home sales price was down 10%.
Graphically, you can see the big decline in new home sales as real median household income and average wage growth crashed.
The same wage declines is also putting a hurt on renters with rising home and apartment prices/rents.
For those of you who want to celebrate, how about THIS chart? New home sales since 2011.
Celebrate, celebrate, dance to the music!
This is another fine mess! The ability of American households to pay rents for apartments/housing is declining as rents rise and wage growth is flat.
And apartment prices are soaring along with The Federal Reserve’s Balance Sheet.
Well, Ben and Janet. This is another mess that you’ve gotten us into.
October has been a wild ride in the Treasury, Equity and Mortgage Markets. The Treasury MOVE Index, the CBOE VIX and the EuroSTOXX V2X all spiked last week, but have returned to “normal.”
Normal, that is, for a bond market dominated by Central Bank tinkering.
Bankrate’s 30 year mortgage rate has now broken through the 4% barrier.
Even with the decline in the Treasury 10 year yield and mortgage rates, mortgage purchases applications remain “pining for the Fjords.”
Mortgage purchase applications are the new “Norwegian Blue” parrot.
I can’t bring myself to turn on CNBC or Fox Business and listen to apologists try to sugar coat the dismal jobs recovery in the USA (Mark Zandi, can you hear me now?)
First, the good news. Initial jobless claims rose to 283,000. But that remains far below the peak in March 2009 of 665,000.
Now for the bad news. Despite the improvement in initial jobless claims, real median household income and average wage growth remain lower than in 2007.
And to top if off, The Federal Reserve through it’s policies have driven short-term rates to near zero, punishing savers. This of course is an attempt to encourage Americans to take on more risk and invest in risky assets.
Now, while America’s middle class is lagging in terms of wage and income growth, The Federal Reserve is pumping air into real estate prices and the stock market.
So now you can understand Fed Chair Janet Yellen’s plea for folks to “get on the asset train!”
That is, until it crashes and burns.
But not to worry. As long as Chinese investors pump up Irvine and Arcadia home prices in the Los Angeles area and continue to purchase New York commercial property, what can go wrong?
This is an economic recovery?
Texas employment since December 2007, up 1.32 million jobs. All other states lost 1 million jobs.
This disparity between Texas and the other 49 states make the following chart even more ominous … for the other 49 states.
To quote Ray Wylie Hubbard. Texas is a state of mind.
The Mortgage Bankers Association released their Mortgage Application Survey this morning … and mortgage purchase applications fell AGAIN despite a large drop in the Treasury 10 year rate.
And since 2007, the US Treasury 10 year yield have fallen ALONG with mortgage purchase applications.
The reason? Poor labor market recovery since 2007 in terms of wage growth and real income.
Apparently, we have a broken transmission between low interest rates and mortgage purchase applications.